- UK electricity prices have risen by around £3/MWh over the past month as coal prices have rallied and gas prices have also strengthened. The front-month futures baseload contract was up from around £32.60/MWh in May to around £35.55/MWh in June, an increase of around 9%. The gains reflected short-term weather conditions, with lower solar generation and less wind available to meet peak demand, as well as planned outages on the UK-France interconnector, which are expected to restrict French imports.
- UK electricity forward prices also strengthened, with contracts for winter 2016-2017 rising by 7-8% over the month. The UK electricity forward curve continues to reflect tightness over the coming winter, with the winter-summer spread wider than last year despite lower outright prices. Baseload prices for the coldest winter months are now above £44/MWh and peakload prices are trading at above £52/MWh over the same period.
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